Classic cars have been one of the best-performing alternative investments. Collector Rodger Dudding explains why he thinks values will continue to soar
Rodger Dudding owns the largest private collection of classic cars in Europe, worth an estimated £40 million. “It’s a hobby, a passion, an indulgence,” he says. But he also points out that the revolution underway in new vehicle technologies will mean collections like his will serve an increasingly important historical purpose.
“In the next 10 years most cars as we know them will probably not exist – they will either be electric or they will be hydrogen-powered. The era of the internal combustion engine is waning.”
Rodger’s extraordinary collection – which includes an Audi that belonged to Diana, Princess of Wales, and an Aston Martin Lagonda owned by Dodi Fayed, the man with whom she died in 1997 – was funded by an equally extraordinary career in car-related property: the humble lock-up garage (see below).
Financial success enabled Rodger to indulge his passion for motoring, building a collection of cars – many of them classics – that was to grow exponentially and transform into a business in its own right. He owns more than 400 today, and hopes to buy a further 100 in the next year or two.
“I’m now in the fortunate position that if I want to buy a car I can,” he says. “Most people save up for several years to buy a classic car, but I have leapfrogged that.”
Storage for his collection quickly became a problem. He acquired a secure site in Potters Bar, Hertfordshire, to store his collection and rented out the extra space to other owners. But over time his growing personal collection squeezed the others out.
“We had less and less space to store clients’ cars, which helped pay for the operation. That led me in 2015 to buy other premises up the road and create a Mecca of a car storage facility.” That was the origin of Studio 434, a business that exists primarily as a way for Rodger to subsidise his love of collecting cars. He rarely sells any of the vehicles.
The extent and diversity of Rodger’s collection – it represents over a century of motoring, from a 1911 Vulcan tourer to a 2017 Rolls-Royce Wraith, and includes 24 variants of the iconic Aston Martin Lagonda ‘wedge’ – has made Studio 434 what he describes as a
“one-stop shop” for film-makers and wedding planners.
“They can phone us and say, ‘Have you got an X? Have you got a Y?’ The chances are we have.”
Like many entrepreneurs, Rodger started young. In the years following the end of World War II, he bred rabbits to sell to a local butcher. In the 1950s, following in his father’s footsteps, he joined the Royal Navy, where he served an apprenticeship in mechanical engineering before receiving an honourable discharge owing to a back injury. During the 1960s, he honed his sales skills working for tobacco firm Rothmans.
In 1970, Rodger founded his first business, Lonsto International, manufacturing and installing queue management systems. But his big break came when he bought his first lock-up storage units from a friend.
“I was on my third mortgage on the family home to raise the money to keep the company alive,” Rodger remembers, “when I was offered 10 lock-up garages in Thornton Heath, Surrey. I thought the idea tacky. Did I really want to be associated with lock-up garages?
“It wasn’t until month two or three that the first rental cheque came through,” Rodger says. “It was a lifesaver because I was struggling to get the queue management system off the ground. I started buying more garages and because I couldn’t afford for someone else to repair them and maintain them, I was there every weekend, much to my wife’s chagrin, painting doors or repairing roofs.
“It took me a long time to build up to about 1,000 units, but then we had a juggernaut: we’d established a business.”
With bank lending, Rodger quickly amassed a vast portfolio of units on often unglamorous sites around the country. It occurred to him that they had potential beyond storage.
“If I could get planning permission on a site of 10 garages to build a pair of semi-detached houses or a small block of flats, would that give me a better return on investment than leaving it as lock-up garages?” Rodger says. “Sometimes yes, sometimes no, but that caused me to exploit the idea of doing residential developments, which I started about 25 years ago. We build between 10 and 30 residential units a year.”
The Historical Automobile Group International is a research business that analyses rare classic car prices. The index below, known as HAGI Top Index, tracks a number of constituent vehicle prices, and includes classic marques such as Ferrari, McLaren, Porsche and Mercedes-Benz.
The index suggests the value of these vehicles has risen more than fourfold in the past decade.
This article is issued by Cazenove Capital which is part of the Schroder Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.